Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, July 16, 1995                   TAG: 9507170089
SECTION: VIRGINIA                    PAGE: D-6   EDITION: METRO 
SOURCE: F.J. GALLAGHER STAFF WRITER
DATELINE:                                 LENGTH: Medium

COST WOULD OUTWEIGH BENEFITS OF NEW CENTURY CALLING AREA

That was the reaction of several local telephone company representatives to the New Century Council's proposal to transform the region into one huge local calling area - unfettered by long-distance charges for short-distance calls.

"Technically, it could be done," Alan Layman, president of the Roanoke & Botetourt Telephone Co., said after he stopped laughing. "I'm not slamming the idea by any means, but the cost would be enormous."

Telephone companies, he said, would need to offset the loss of long-distance revenue by increasing the basic rates paid by all the customers within a particular calling area.

For example, the Roanoke & Botetourt Telephone Co. recently added the city of Salem to Troutville's local calling area. As a result, residents of Salem and Troutville will see an additional charge tacked on to their telephone bill every month. But they won't be charged for individual calls to each other.

To implement the New Century proposal, he said, residents in the region would have to be willing to swallow a potentially huge increase in the amount they pay for unlimited local calling. Phone company officials couldn't put a dollar value on the proposal without knowing specifically what's involved.

Don Reed, the area manager for Bell Atlantic Corp., agreed with Layman's view, adding that the New Century region comprises areas served by several different telephone companies, further complicating the matter.

"While it sounds very simplistic, it starts becoming very complicated when you put all the pieces in," Reed said. "Not to say that it couldn't be done or that it is a bad idea. There's just so many variables that need to be looked at before you could affect a toll-less area."

But, he said, if people want to increase the size of their local calling area, a mechanism already is in place. Here's how it works:

First, somebody would need to gather the signatures of 5 percent of the affected area's customers on a petition requesting a change in the local calling region and forward it to the State Corporation Commission. The SCC in turn requests the telephone company serving the area to perform a cost study indicating how much a customer's basic monthly rates would need to increase to offset the loss in long-distance revenue.

Once the cost is determined, the SCC sends ballots to the area's customers, who vote on the proposed rate increase. At least 50 percent of the ballots must be returned for the results to be binding.

And if the increase to the basic monthly charge is determined by the telephone company to be greater than 5 percent, Reed said, customers in the proposed expansion area must approve the increase also.

"Each local exchange would have to vote," on the New Century Council proposal, Reed said, "and it would probably take a year or so until we could get a yeah or a nay from the people."

And if every exchange did approve the new expanded local calling district, Bell Atlantic Media Relations Manager Paul Miller said, the region's basic monthly rate would skyrocket.

"Enlarging the calling area isn't free," Miller said. "You have to pay for it. If they decided they wanted a 100-mile local calling area and they're willing to pay the price, they could do it."

New Century region residents may see their local calling areas expand on their own in the near future, Miller said, as new laws allowing for increased competition among telephone companies go into effect.

Bell Atlantic, he said, has already significantly expanded the size of some local calling areas around the state and expects to take similar actions in the New Century region.

Those expansions, Miller said, included implementing "contiguous calling," whereby any exchange's local calling area automatically includes the exchanges next to it.

Layman agreed with Miller's view, adding that he expected Virginia to approve new legislation in 1996 encouraging competition.

"Competition is working," he said, "but the New Century Council idea wasn't bad, by any means. Sure, not all of it will come to pass. But if you don't have a dream, you won't get anything."